THE blast of cold weather dubbed the “Beast from the East” cost Dorset insurer LV= £17million in claims.

The County Gates-headquartered business saw profits in its general insurance division fall 53 per cent to £23m in the fist half of the year.

But it said it had made “steady progress” overall.

Operating profit as a whole for the friendly society stood at £42m for the six months, down from £56m in the same period last year.

Group chief executive Richard Rowney said: “We have made steady progress in the first six months of the year with good underlying trading results partially masked by the impact of the ‘Beast from the East’ bringing severe weather across the UK in February and March.

“Tackling competitive trading conditions and a significant change agenda, the business continues to perform well with top-line growth in general insurance and increased profits in life.”

Operating profits in the life and group divisions were up from £7m to £19m, but new business sales were down five per cent to £983m.

Mr Rowney said: “In common with most other home insurers our general insurance business was adversely impacted by severe weather at the start of the year which resulted in £17m of net claims leading to an operating profit of £23m for the first six months.”

He added: “The underlying business continues to perform well with top line growth in both our direct and broker personal lines businesses.”

Underlying growth in general insurance stood at four per cent, excluding discontinued commercial business. Excluding the impact of bad weather and reduced returns from investment, underlying profit stood at £55m, LV= said.

Under a strategic partnership agreed last year with Allianz, LV= commercial insurance products are being transferred to the German insurance giant, with 260 jobs earmarked for redundancy earlier this year.

Allianz’s personal home and motor policies are being transferred to a joint venture set up by the two insurers.

Mr Rowney said: “I remain excited by the potential of the partnership and we continue to explore ways of working together.”

In the life and pensions business, operating profit increased by 171 per cent to £19m.

Mr Rowney said: “We enter the second half of the year with both of our trading businesses in good health and a clear vision for the future. We will continue to maintain a tight grip on our costs while seeking to grow.”

LV= employs more than 2,000 people locally at its three buildings in the County Gates area of Westbourne.